Whether it’s first-time buyers keen to get on the ladder or recent retirees wanting to downsize, new builds are a popular option for many buyers. But what do you need to know when shopping around – and how can you ensure your purchase goes according to plan?
Research the developer
One of the most common complaints from buyers is that they’ve received bad service from their developer. The Homeowners’ Alliance, a consumer group, recommends that the first thing any potential buyer does is to conduct some basic due diligence on who’s actually building your home.
Put their name into Google or Mumsnet (always a treasure trove for consumer advice) and see what comes up. Pay a visit to any other sites the developer has worked on and see how the houses look. If you can, try chat to other buyers and see if they encountered any issues or have any advice.
While reliable data on the quality of home builders is hard to come by, it’s worth looking at the annual customer satisfaction survey carried out by the House Builders Federation. The scheme is optional so doesn’t cover all members (Berkeley Homes, for example, is not a member) but should give you an idea of how your developer fares.
Know the area
Make sure you spend some time researching exactly what it is you’re buying – and whether it’s likely to hold its value.
Have a deep dive into house prices in the area. How have existing properties held their value, both in terms of resale and the rental market? Calculate a rough price-per-square-foot for the area and compare it to the cost of what you’re getting. This should give you a good idea of the price premium you’re buying for a new build.
Find out more, if you can, about the development site itself. When will it be completed? If you’re going to be living next to a building site for the next 18 months, you should know that in advance. Ask the developer how many units have been sold so far and the ratio of owner-occupiers to investors. Again, if you’re going to be the only permanent resident on a road of renters, you’d be wise to know that now.
Be ready to negotiate
Another common piece of advice to buyers is to know when to negotiate. Evidence shows that, while they might like to pretend otherwise, the majority of developers are willing to consider a sensible offer – particularly if you time it right.
Developers are likely to be more open to offers when their sales deadlines are looming. Take a look at Companies House to find out when the developer’s financial year ends. If you’re into the final quarter, they may be more willing to haggle. Think about the developers’ own cash-flow needs too: when it comes to large off-plan developments, many companies need to secure financing along the way. If they’re short of cash, you have leverage.
And if the developer isn’t willing to shift on price, why not see what else they can offer. Many buyers ask developers to include higher quality fittings and fixtures, or to stump up to cover stamp duty. Both options are worth keeping in mind.
Brush up on your rights
According to television’s Phil Spencer (one half of Phil and Kirsty), one of the most important things when it comes to buying a new build is to know where you stand in the event of any potential disputes or dramas.
His advice is to make sure your builder or developer is part of a recognised warranty scheme. That way if the worst comes to the worst, and your developer goes bust before completing, you should encounter no problems getting your money back. It’s worth reading up on your warranty in some depth. It will spell out the details of the dispute resolution process should you and your builder have a serious disagreement.
Have a look, too, at the industry’s Consumer Code for Home Builders, by which all warranties are bound. The Code places a number of obligations on the builder – including a duty to provide realistic information on when your home will be completed. The Code also states that, in the event of an unreasonable delay (typically around six months), the builder must refund your money in full.
Stay on top of the small stuff
Even with the most high quality new homes, there are always going to be some small problems – or ‘snags’ as they’re known in the trade. In theory it’s the responsibility of the builder or developer to get these fixed for you, provided you inform them promptly.
Between exchange and completion, you should conduct your own snagging survey to identify any defects and then pass this on to your developer. This is something you can do yourself or, for that extra piece of mind, via a professional ‘snag inspection’ company.
The Homeowners’ Alliance recommends New Build Inspections noting that, unlike other companies, they only work for buyers (and never builders or developers), which means no pesky conflicts of interest.